Gold rebounded on Tuesday after the previous session's slide, with spot prices climbing 1.6% to settle at $4,182.45/oz even as the dollar firmed. The move came alongside a pullback in oil prices and an easing bond-market rout, while traders still price in more Fed rate hikes.
Gold climbed on Tuesday, bouncing back from a slide in the prior session and shrugging off a firmer dollar. Spot gold rose 1.6% to settle at $4,182.45/oz, while gold futures advanced 1.1% to the same settle level. The advance came as oil prices declined and a U.S. Treasury bond rout eased up.
Oil retreats from Gulf tensions
Brent crude futures settled 2.2% lower at $95.73 a barrel, their lowest level since September 23. The decline came despite President Donald Trump's rejection of an Iranian proposal to reopen the Strait of Hormuz. According to Investing.com, he also called an Axios report on possible sanctions relief for Iran "untrue." Reuters reported that Qatari mediators were still expected to hold separate talks with both sides.
The mood also improved on signs of better oil flows out of the Gulf. Saudi Arabia reportedly resumed exports from the Red Sea port of Yanbu after repairing damage to its East-West Pipeline, and TankerTrackers.com estimated Saudi crude exports averaged nearly 9 million barrels per day over the past seven days. Separately, the U.S. Department of Energy offered to loan companies up to 40 million barrels from the Strategic Petroleum Reserve as part of a global deal to unlock reserves.
Bond rout eases as Fed weighs next move
Longer-term Treasury yields had surged to multi-decade highs earlier Tuesday, with the 10-year yield hitting its highest level since April 2002 and the 30-year yield its highest since June 2002. The rout has been driven by rising inflation concerns tied to oil prices, worries over debt issued to fund AI infrastructure buildouts, an increasingly hawkish Federal Reserve and ballooning U.S. fiscal debt.
Traders have also boosted their odds of more rate hikes in October and December after signs of economic resilience. However, the Conference Board's consumer confidence index slipped to 81.9 in September, its lowest reading since May 2014. The bond rout eased later in the day after New York Fed President John Williams said the Fed need not rush its next move.
Source: Commodities & Futures News
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